First-time buyers should not wait on the sidelines, as delays could mean missing out on one of Dubai’s most significant windows of opportunity, Matthew Gregory, Senior Director of Strategy at bayut and dubizzle told Lana in an exclusive interview.
Gregory said that while sale prices had softened by around two per cent and rents by roughly five per cent, the fundamentals of Dubai’s market remained intact.
“Dubai is going to come out stronger. Prices will continue to increase, but there will be a baseline. In terms of price per square foot, we [Dubai] are still very competitive compared to the likes of New York, London, Singapore – so there’s still a huge opportunity to be had by settling down and investing or by actually being an end user here in Dubai,” he said.
Villas outperform apartments on supply constraints
However, when asked what property types investors should buy, Gregory said villas carry less risk than apartments. He pointed to a limited supply of villas compared with the volume of apartment stock set to reach the market.
“The amount of supply of villas is far less. There is far fewer villas than apartments. So villas are likely to be far more robust in terms of pricing. So, if you can afford to get a villa and that is what you want, then a villa is the right choice. As for apartments, there are lots of them and there are even more that are going to be coming to the market as well.
“Everyone, even before the conflict, felt that apartment prices are likely to stabilise – if anything, a downturn – just purely because of the amount of stock that is coming to the market – and that was without a conflict happening,” he explained, advising those looking at apartments to “maybe wait a little bit.”
Off-plan market sees 51 new launches since start of conflict
The off-plan market has not stood still, Gregory revealed adding that 51 developments had launched since the start of the conflict, with developers adjusting payment plans to attract buyers in a more competitive environment.
“There’s likely to be, because of the sheer volume of apartments, some pretty good deals – not from a price perspective, but from a payment plan perspective,” he said. “Developers are now tuning into that to attract people to buy their units – adjusting payment plans, giving people the opportunity to possibly put down less in order to hedge for the future.”
For buyers purchasing a home rather than an investment, Gregory offered a framework built around practicality rather than returns. He said the first question any buyer with a family should ask is where their children go to school. “School first, apartment or home second, work third – that gives you an opportunity to lower your commute,” he said.
“If you are an investor, then there is all sorts of opportunities out there, depending on the type of unit that you might want to buy.J VC is a massive opportunity for investors, but also we see International City – which no one really talks about as being a high ROI-ed community. In terms of villas, you have got all the new lagoons and projects coming out in Dubailand. But, it really comes down to personal preference. I personally would say – choose your school, then choose where you want to buy,” he said.
When asked how many owners had moved to sell their properties during the period of uncertainty, Gregory said bayut and dubizzle’s own data pointed to stability on the sales side – though rental listings had risen.
“Sale listings did not really increase. Rental listings increased a lot,” he said, adding that the rise in rental supply was connected to short-term lets moving back to the long-term market as tourism experienced disruption. He said that bayut and dubizzle does not have direct visibility into transaction data held by the Dubai Land Department (DLD).
Dubai will come out stronger, Gregory says
Throughout the interview, Gregory returned to one theme: that Dubai’s underlying position – its price-per-square-foot competitiveness relative to New York, London, and Singapore – means the case for investment remains intact.
His advice to those looking to invest was to conduct thorough research and focus on payment terms rather than seeking a price discount.
“There is lots of opportunity, lots of deals, lots of payment plans now that are really towards the investor,” he said. “It is about making sure that you just do your due diligence and find the right area for you. It is all positive, and again, Dubai and the UAE will come out of this even better than it was before,” he said.
